CMB_1993 — Page 22

Notes on The Accounts (Continued)

10. INTEREST IN SUBSIDIARY

Unlisted shares, at cost

Amount due from subsidiary

Details of the subsidiary are as follows:-

Name of company

Island Communication Enterprises Limited

11. INTEREST IN ASSOCIATED COMPANY

Unlisted shares, at cost

Loans to associated company

Country of incorporation and operation Hong Kong

Issued ordinary share capital

$185,073,024

Percentage directly held

100%

1993

1992

$000's

$000's

569,356

473,581

1,570

1,624

570,926

475,205

Principal activity

Investment holding

The group

1993

1992

$000's

$000's

1 402,944

1

402,944

402,945

402,945

Details of the associated company, which is incorporated in the British Virgin Islands, are as follows:-

Name of company

Swire and Island Communication

Developments Limited

("Swire and Island")

Percentage of shares held

Ordinary shares - 40%

Non-voting dividend shares

100%

Principal activity Property development for resale and investment

Pursuant to a shareholders' agreement ("agreement") entered into between Swire and Island and its shareholders on 6th November, 1991, Swire and Island purchased for redevelopment purpose two plots of land respectively from the company and its subsidiary, Island Communication Enterprises Limited ("ICE") for a total consideration of $980 million. In accordance with the terms of the agreement, the cost of land together with any subsequent modification premium thereon are financed by interest free shareholders' loans in proportion to the shareholders' respective holding of ordinary shares. At 30th June, 1993, the amount of modification premium payable is still subject to negotiation with the Hong Kong Government.

The other shareholder has provided a guarantee to a bank in respect of a loan facility of $600 million extended to the associated company. ICE has provided an indemnity to the other shareholder for forty percent of this guarantee amounting to $240 million. At 30th June, 1993, the bank loan obtained by the associated company under this loan facility amounts to $52 million approximately.

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